EU Brexit chief says UK must settle account of what it owes

BRUSSELS â€” The European Union’s chief Brexit negotiator insisted Wednesday that Britain’s accounts must be settled before any talks on its future trade relationship with the EU can take place, as he warned that time is running out to seal a deal by 2019.

Unveiling the European Commission’s negotiating mandate on Britain’s departure, Michel Barnier said he was not hostile to Britain and the bloc did not want to punish it for leaving â€” but “we have to settle the account, not more not less.”

The amount London owes the EU has become one of the most contentious subjects in the Brexit process, with some reports estimating it could climb to as much as 100 billion euros (109 billion dollars) â€” a figure that Britain has flatly rejected paying.

It’s the first time a member has ever left the EU, so these negotiations are taking the Europeans into uncharted waters. The process is unprecedented and complicated, and combined with fresh delays caused by snap elections in Britain, has ratcheted tensions between Prime Minister Theresa May’s government and the 27 nations that will remain in the EU.

Barnier underlined that Britain and its EU partners had together agreed the bloc’s 2014-2020 budget, and that Britain must pay up its share of contributions.

“Engagements were undertaken and they have to be honoured. It’s a question of responsibility,” he said.

Barnier did not specify how much Britain should pay, but his negotiating mandate said it should cover budget payments, the cost of ending Britain’s membership of any EU institution including banks, and the bill for relocating any EU agencies on its territory. London must also pay in euros rather than pounds, meaning that it should bear the currency exchange costs.

He said that in the coming months he will focus on tackling two other issues: The future of some five million citizens affected by the move, and border issues with neighbouring Ireland.

Barnier, a former French government minister, told reporters in Brussels that “the U.K. must put a great deal of energy and effort” into those topics, and talks can only start in earnest once a new government is formed in London. He suggested that the parties will have some 16 months to negotiate, leaving time for respective parliaments to endorse any accord.

“Time is short, very short. Days are going by,” he said.

Ahead of Barnier’s comments, the British government minister charged with overseeing the withdrawal rejected the notion that Britain will be forced to pay a reported bill of 100 billion euros.

David Davis told television station ITV that the EU was not able to arbitrarily set a figure and that the final amount paid will come out of negotiations.

The bill was widely expected to amount to about 60 billion euros, but The Financial Times reported Wednesday that it had gone up amid added EU demands on things like farm-related costs, and upfront loan payments to countries such as Ukraine and Portugal.

Davis said Britain would meet its international obligations but that “we will not be paying 100 billion.”

He also dismissed reports the EU could bar May from Brexit discussions at future heads of state and government meetings.

The European Parliament’s Brexit point-man Guy Verhofstadt also declined to go into numbers. He said the parties must first agree on the “accounting principles” from which the bill will be determined.

“We cannot ask to the 27 remaining members to pay the bill for the departure of a country,” he said. As in any divorce, he added, “you can’t just say ‘My partner will take all the burden.'”

Money aside, the top priority of the talks is how to handle the rights of some 3 million citizens from the 27 nations living in Britain and up to 2 million Britons residing on the continent. All face massive uncertainty on such issues as health benefits, pensions, taxes, employment and education.

Another key aim is to keep people and goods moving smoothly across the border between Northern Ireland, which is part of the U.K., and EU member Ireland.

Under the negotiating mandate, EU states would have to approve progress on these and other immediate exit issues before Barnier can start negotiating the outline of the bloc’s future relations with Britain after it leaves.

Some British politicians have suggested that walking away would be better than a bad deal, and Barnier conceded that the EU has planned for such a contingency.

“We are prepared for all options,” he said. “But the option I am working on is getting an agreement.”